NEW YORK - Billionaire activist investor Daniel Loeb on Tuesday called on biotech company Amgen (IW 500/67) (AMGN) to consider a breakup of the company to boost shareholder value.
Loeb's hedge fund, Third Point, urged Amgen management to weigh a split creating a "MatureCo" for cash-generating products and a "GrowthCo" for managing new product research and development.
Such a reorganization likely offers the "most upside" for a company that has been "undervalued" compared with other pharma equities, Third Point said in a quarterly note to fund investors.
Loeb successfully pressed for shakeups at Yahoo and other leading companies and in May reached a deal with Sotheby's to join the board of the auction house after faulting management for weak strategy and excessive spending.
"It is well-established that disparate business units generally benefit from operating separately due to distinct corporate cultures, superior efficiencies and a greater focus for employees and management alike," Third Point said.
Amgen said in a statement that it has "always appreciated the perspective of all its shareholders, including Third Point, and welcomes constructive input toward our common goal of enhancing shareholder value."
Amgen said it will update the market on its strategy and restructuring plans during an investor day Oct. 28.
The Third Point letter praised Amgen CEO Bob Bradway for being "open-minded and receptive" to ideas.
"We hope to maintain our constructive dialogue with management as the company moves towards closing its valuation gap," Third Point said.
Copyright Agence France-Presse, 2014
